TaxTMI 
TaxTMI 
2025 (8) TMI 1665
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....see. Ground No.1 & 2: Disallowance of Rs. 39,85,563/- on account of short term capital loss: 3. During the course of assessment the AO noticed that assessee has claimed short term capital loss of Rs. 85,74,978/- on the scrips of M/s Global Infratech & Finance Ltd. From the details filed by the assessee the AO noticed that assessee purchased 163,000 shares of M/s Global Infratech & Finance Ltd. at an average purchase value of Rs. 92,48 per shares to the amount of Rs. 1,50,88,623/- in December, 2013 and sold these shares in March, 2014 on an average sale value of Rs. 40,08 amounting to Rs. 65,23,167/-at a loss of Rs. 85,74,978/-. On query, the assessee explained that it had purchased the above referred shares from BSE directly through share broker named M/s Motilal Oswal Securities Ltd. duly registered with stock exchange and SEBI. The assessee has also submitted copies of Demat statement showing that said share were transferred through assessee's broker M/s Motilal Oswal Securities Ltd. which was already in dematerialized form. The assessee also submitted that the purchase consideration was duly paid through proper banking channel to the assessee's share broker for the purchas....
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....Ld. Counsel also submitted that profit in this scrip was increased from AYs 2011-12 to 2013-14 and assessee has traded in the share when curb on trading was lifted. The Ld. Counsel has also submitted that similar issue on identical facts has been adjudicated by the various benches of the ITAT on the similar scrip in favour of the assessee, he referred the decision of Coordinate Benches of Mumbai vide ITA No.6249/Mum/2018 in the case of Shri Mukesh B Sharma Vs. ITO,11(3)(2) dated 29.05.2019; ITA No. 3186/Mum/2018 in the case of Shri Anurag Agarwal Vs. ITO-24(1)(3) dated 06.08.2020; ITA No. 862/Mum/2024 in the case of ACIT Vs. Keshavji Nongha Shah, dated 01.10.2024. 6. On the other hand the ld. DR supported the order of ld. CIT(A). 7. Heard both the sides and perused the material on record. During the course of assessment proceeding regarding short term capital loss of Rs. 85,74,978/- on sale of share of M/s Global Infratech & Finance Ltd. the assessee filed relevant supporting documentary evidence along with balance sheet, schedule to financial statement, copies of trading notes from the Motilal Oswal Securities Ltd. The share were purchased in open market from the platform of....
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....e assessee has carried out the transactions of purchase and sale of shares in connivance with the people who were involved in the alleged rigging of prices. It is stated by Ld A.R that the transactions carried on by the assessee were not subjected to scrutiny by SEBI at all. 9. We notice that the AO has recorded statement from the assessee u/s 131 of the Act, but he could not find any fault with the assessee. The AO has only observed that the assessee could not explain as to why he invested in the shares of company, whose fundamentals are weak. However, the assessee had stated that he has made investment on the basis of advice given by some known person. In our view, the rationale of making investment may not be relevant to arrive at the conclusion that the transactions of purchase and sale of shares are bogus. We also notice that the assessee has: (a) purchased these shares by paying consideration through banking channels. (b) dematerialized the shares and kept the same in the Demat account. (c) sold the shares through stock exchange platform. (d) received the sale consideration through banking channels. Further, the shares hav....
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...., connected the Assessee in some way or either with these brokers and the persons floating the two companies. It is only, after the Assessee who is supposed to dealing in shares and producing all the details including the DMAT account, the Exchange at Calcutta confirming the transaction, that the Appeal of the Assessee has been rightly allowed. The Tribunal has not merely interfered with the concurrent orders because another view was possible. It interfered because it was required to interfere with them as the Commissioner and the Assessing Officer failed to note some relevant and germane material. In these circumstances, he submits that the Appeals do not raise any substantial question of law and deserve to be dismissed. 5. We have perused the concurrent findings and on which heavy reliance is placed by Mr. Sureshkumar. While it is true that the Commissioner extensively referred to the correspondence and the contents of the report of the Investigation carried out in paras 20, 20.1, 20.2 and 21 of his order, what was important and vital for the purpose of the present case was whether the transactions in shares were genuine or sham and bogus. If the purchase and sale of sha....
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....able and which gave details of the transactions. The contract note is a system generated and prescribed by the Stock Exchange. From this material, in para 11 the Tribunal concluded that this was not mere accommodation of cash and enabling it to be converted into accounted or regular payment. The discrepancy pointed out by the Calcutta Stock Exchange regarding client Code has been referred to. But the Tribunal concluded that itself, is not enough to prove that the transactions in the impugned shares were bogus/sham. The details received from Stock Exchange have been relied upon and for the purposes of faulting the Revenue in failing to discharge the basic onus. If the Tribunal proceeds on this line and concluded that inquiry was not carried forward and with a view to discharge the initial or basic onus, then such conclusion of the Tribunal cannot be termed as perverse. The conclusions as recorded in para 12 of the Tribunal's order are not vitiated by any error of law apparent on the face of the record either. 7. As a result of the above discussion, we do not find any substance in the contention of Mr.Suresh kumar that the Tribunal misdirected itself and in law. We hold ....
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....tances are properly analysed and correct test is applied to decide the issue at hand, then, we do not think that question as pressed raises any substantial question of law. In the case of CIT vs. Jamnadevi Agarwal (20 taxmann.com 529 (Bom), the Hon'ble Bombay High Court held that the transactions of purchase and sale of shares cannot be considered to be bogus, when the documentary evidences furnished by the assessee establish genuineness of the claim. In the case of PCIT vs. Indravadan Jain (HUF) (ITA No. 454 of 2018)(Bom), the broker through whom, the assessee had carried out the transactions have been alleged to have been indulged in price manipulations and the SEBI had also passed an order regarding irregularities and synchronized trades carried out in the shares by the said broker. However, the evidences furnished by the assessee with regard to purchase and sale of shares were not doubted. Under these set of facts, the Hon'ble Bombay High Court held as under:- "....The CIT(A) came to the conclusion that respondent bought 3000 shares of RFL, on the floor of Kolkatta Stock Exchange through registered share broker. In pursuance of purchase of shares the said brok....
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.... the long term capital gains declared by the assessee cannot be assessed as unexplained cash credit u/s 68 of the Act. Accordingly, we confirm the order passed by Ld CIT(A)." 8. In view of the aforesaid circumstances and respectfully following the findings of the coordinate bench and considering the various judicial precedents as discussed in the decision of the ITAT as referred above, we set aside the order of the ld. CIT(A) and direct the AO to allow the claim of short term capital loss. 9. This ground 1 & 2 of appeal of the assessee are allowed. Ground No. 3: Adhoc addition of Rs. 6,48,640/- being commission @ 3% of bogus share transactions: 10. During the course of assessment on estimated basis the AO assumed that assessee has paid commission for obtaining accommodation entries of bogus short term capital loss, therefore, 3% commission on the amount of short term capital loss claimed by the assessee was added to the total income of the assessee at Rs. 6,48,640/-. 11. Since we have allowed the claim of short term capital loss as the AO has not established with relevant material that assessee has actually obtained bogus entries on short term capital loss, therefore....
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....he same, we request your honor to kindly consider the said funds as explained and accordingly not to add the same to the total income of the assessee company" Further the assessee has also submitted the same documents before the assessing officer. The assessee has also submitted the details regarding the nature and source of the sum credited in the books of accounts i.e. copies of ITR acknowledgement, balance sheet, statement of profit and loos a/c and bank statement reflecting the loan taken etc. However, the AO has not agreed with the submission of the assessee stating that no company will provide loan without interest and guarantee, therefore, the AO treated transaction carried out by the assessee with M/s. Grafton Merchant Pvt. Ltd. as bogus and added to the total income of the assessee. 13. The assessee filed the appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee. 14. Before us the ld. Counsel submitted that assessing office has neither conducted any inquiry nor brought any material on record to prove that the loan taken by the assessee was not genuine. He further submitted that assessee has obtained the loan from the known party and....